Schizophrenia is a devastating mental illness affecting approximately one percent of the world's population and is associated with substantial unmet medical need. Negative symptoms (e.g., constricted emotional expression and social behavior) and cognitive impairment (e.g., working and verbal memory) are core clinical features of schizophrenia and substantially contribute to the functional disability associated with this illness. Both of these symptom domains are relatively unresponsive to approved treatments for schizophrenia which has prompted a substantial focus on identifying new targets and developing novel therapeutics for these symptom complexes. Several lines of investigation have supported the potential therapeutic effects of estrogen for negative and cognitive symptoms in schizophrenia. However, estrogen has had limited therapeutic application for male and premenopausal patients with schizophrenia because of tolerability concerns including uterine cancer liability, and heart disease and feminization effects in men. Selective Estrogen Receptor Beta (ER beta) agonists are a new class of treatments that are relatively free of estrogen's primary side effects and yet have demonstrated estrogen-like effects in brain including improvement in cognitive performance and an association to extremes in social behavior. Thus, these agents may have a therapeutic role for cognitive and negative symptoms in schizophrenia. The primary objectives of this application are to determine if the selective ER beta agonist LY500307 significantly improves negative and cognitive symptoms in patients with schizophrenia. Secondary aims include assessing LY500307 effects on cerebral blood flow during working and episodic memory tasks with fMRI, and electrophysiological indices of auditory sensory processing and working memory. A single seamless phase 1b/2a adaptive design will be used to evaluate two LY500307 doses (25 mg/day and 75 mg/day) in the first stage of the trial (year 1 of the application) to determine which dose should be advanced to stage 2 (years 2and 3 of the application) or if the trial should be discontinued. Go/No Go criteria to determine advancement to stage 2 are: 1) positive signal detection in at least one of three cognitive and negative symptom primary endpoints, and 2) failure to decrease testosterone levels from baseline which is reflective of maintaining selectivity for ER beta. In stage 1, 30 patients with schizophrenia will be randomized (1:1:1) to one of the two doses of LY500307 or placebo to an 8-week add-on to antipsychotic medication trial. Providing go/no go criteria are met, 60 patients will be randomized (1:1) in stage 2 of the trial to the winning LY500307 dose or placebo. At this time, only male schizophrenic patients will be studied because of the extensive safety data base in males (>400 males treated for 6 months) obtained by Eli Lilly demonstrating favorable safety and tolerability. Results of this study will determine if LY500307 should be advanced for further testing in schizophrenia.